St. Lucia - Services
Services account for almost three-quarters of St. Lucia's gross domestic product, supported by tourism. There were 688,460 visitors to the island in 1999, according to the Caribbean Development Bank (CDB), with 259,371 of these staying on the island and 423,114 visiting briefly aboard cruise ships. In 1998 St. Lucia earned US$291.3 million from tourism, almost 10 times the value of banana exports. Unlike other Caribbean destinations, St. Lucia has enjoyed steady growth in its tourism industry since the 1990s, with an encouraging year-on-year increase in the number of visitors who spend a week or more on the island. Much of the tourism sector, however, is concentrated in the all-inclusive category, where vacationers prepay their accommodation, food, and leisure activities in a single package. This means that small, independent hotels and restaurants receive fewer customers, and tourists are deterred from spending money outside the hotel perimeter. Some smaller businesses have reported a 75 percent drop in earnings since the construction of the 8 main all-inclusive hotels.
Tourists come for the island's natural beauty, and St. Lucia hosts special events such as the annual jazz festival and the Atlantic Rally for Cruisers. This latter event alone earns the island US$2 million annually in tourism spending. But as tourism increases, there are concerns about its impact on the island's ecosystem as well as on its social structures. Reports of crimes committed against tourists are now commonplace, and there are anxieties about the long-term future of such natural splendors as coral reefs and the world-famous Pitons, the forest-clad mountains that rise steeply out of the sea.
The government has also declared its intention to turn St. Lucia into a center for international financial services, such as banking and insurance. Like other Caribbean countries, the island hoped to attract foreign investors, both corporate and individual, who wished to avoid paying taxes in their own countries. In early 2001, however, only 1 full bank had been registered in comparison to 117 International Business Companies, companies set up mainly to provide a system for foreign tax evasion. Unfortunately, the launching of the financial services sector coincided with a crackdown on illegal tax havens by the international Financial Action Task Force (FATF), supported by Europe and North America, aimed at stopping money laundering . In 1999 only 990 St. Lucians were employed in the financial sector.